Obama vs Ryan: how the deficit plans compare

April 13, 2011

A combination photo shows House Budget Committee Chairman Paul Ryan (R-WI) taking a question at a news conference held to unveil the House Republican budget blueprint in the Capitol in Washington April 5, 2011 and President Barack Obama delivering a speech on U.S. fiscal and budgetary deficit policy at the George Washington University in Washington, April 13, 2011.  REUTERS/Kevin Lamarque

President Barack Obama set a goal of reducing the U.S. deficit by $4 trillion within 12 years or less, in a speech outlining his plan to tackle the country’s massive debt problem. House Budget Committee Chairman Paul Ryan has laid out a dramatically different vision of a future debt-free America. Here’s a snapshot of how they compare. Add your views in the comments.

Obama believes a goal of $4 trillion in deficit reduction over 12 years or less is achievable, and projects that it will reduce deficits as a share of the U.S. economy to about 2.5 percent of GDP in 2015, and put deficits on a path toward close to 2.0 percent of GDP toward the end of the decade.

Ryan’s 2012 budget reduces deficits over the next decade by $4.4 trillion, calls for $5.8 trillion in spending cuts and also calls for lower tax rates for businesses and individuals.

Obama suggests cuts in non-security discretionary spending will generate an additional $200 billion in savings over 10 years, beyond the $400 billion in savings in the fiscal 2012 budget proposal he offered in February. The White House said that would generate $770 billion in deficit reduction over 12 years.

Obama’s debt reduction framework sets a goal of holding the growth in base security spending below inflation, while ensuring the capacity to meet national security responsibilities, which would save $400 billion by 2023, the White House said.

In addition to savings already presented in Obama’s budget to such programs as agricultural subsidies and the federal pension insurance system, Obama’s plan includes a target of $360 billion in savings from other mandatory programs by 2023, the White House said.

Ryan’s budget reflects $178 billion in savings identified by Defense Secretary Robert Gates. Some $100 billion is reinvested in combat capabilities and the rest is used for deficit reduction. Ryan calls for bringing other spending down to 2008 levels and freezing it there for five years.

In addition to his healthcare overhaul law, Obama is proposing reforms to the government’s Medicare and Medicaid insurance programs for the elderly and poor that the White House said would save $340 billion over 10 years and $480 billion by 2023, including proposals already included in Obama’s budget. Over the subsequent decade, the president’s proposal will save well over $1 trillion, the White House said.

Ryan’s proposal would dramatically alter Medicare and the traditional fee-for-service program would eventually be eliminated. To save the federal government money, seniors would be given federal subsidies based on income and health status to shop for health coverage from private insurers. Medicaid would become a block grant program where the federal government gives states a chunk of money to run the health program for the poor without federal interference.

Obama is calling on Congress to undertake comprehensive tax reform that produces a system that is fairer, has fewer loopholes, is less complex and is not rigged in favor of those who can afford lawyers and accountants to game it, the White House said.

Ryan’s plan would cut the top tax corporate and personal tax rates to 25 percent, down from 35 percent. He calls for repealing Obama’s healthcare overhaul and the roughly $800 billion in tax increases contained in the law.

Obama’s plan calls for efforts to strengthen the government’s Social Security pension system but does not seek to privatize it.  A factsheet on the plans offered no specifics.

Ryan’s plan includes no specifics on Social Security. He calls for bipartisan efforts to improve its finances.

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Amazing, Sen Ryan has a clear better plan for ACTUALLY getting this done and YET so many Americans still want to live in denial of the coming crash of debt…

Posted by ReganLogan | Report as abusive

Once again, the very wealthy,
for whom we go all over the world to defend their economic interests
get off with tax deductions and real people get increased costs.
It takes 10% more to get comparable service from the private sector than Medicare or Medicaid.
It is called the profit.
a gift to the rich and
a net loss to the
ever shrinking middle class.
The Christian Teaching is to whom much is given, MUCH is expected…yet those who prosper the most from our system,
WHINE the most about taxes to support our society.
So Much For American Being
a Christian Nation!

Posted by rakooi | Report as abusive

I will take Obamas plan because everything republicans do, shaft the middle class and the poor. Give aways to the mega rich must stop.

Posted by Wes20 | Report as abusive

While this is informative, it merely reflects what Ryan & Obama say their plans will accomplish. A deeper analysis from economists and the CBO would help clarify what each plan might actually accomplish.

Posted by commbot | Report as abusive

Ryan’s plan is based on a few very unrealistic assumptions. How exactly does he propose for older citizens to buy health insurance on their own? It is nearly impossible to buy health insurance in Florida if you are more than 50 years old. And since it is based on discredited financial assumptions from the Heritage Foundation, how does he plan to make the numbers work? Only voodoo or magic will get him there.
This is nothing more than taking from the middle class to pay for more tax cuts for the wealthy.

Posted by Tunaman | Report as abusive

We will know if the budget cutters on either side are serious when they cut the military budget. Suggestions: (1) announce that we cannot afford our existing wars, and bring the troops home. This will save us at least a trillion dollars. Read Nobel-prize in Economics’ Joseph Stiglitz’s “The Three Trillion Dollar War” if you need an explanation of the costs of the wars. Close most or all of our overseas bases, with the exception of those needed to support the current war efforts. Dump our manned fighter programs, with the exception of some ground attack planes such as the A-10 Warthog. Keep the stealth fighters and the B2. Cut the number of aircraft carriers. Eliminate the M-1 tank, we won’t be fighting any Cold War armor clashes any more, and they are too expensive and too vulnerable to newer antitank missile threats. Push the unmanned drone aircraft instead, and development of unmanned cargo aircraft.

Posted by shaggy8703 | Report as abusive

This is not accurate. The CBO points out the Ryan’s plan actually INCREASES the deficit in significant ways, including the repeal of the health care plan just past. You need to be more analytical about this — don’t accept bogus numbers. For example, the Medicare voucher projects to 30% of the cost of health care. How is that going to work? Aside from the inhumanity, we will have people walking around with and spreading infectious diseases, harming us all.

Posted by nydoc | Report as abusive

Before I start my discourse on irresolute Keynesian economics and how distressed moral hazards of oligopolies spoiled our free lunch I would like to paraphrase someone’s wise observation that if the wealth were equally distributed one fine day, it would not be long before it would be as unequal as ever, the lion’s share going to the most dedicated and competent seekers for it. (Talking about previous stimulus packages)Sure, I would love to have $600 in my M1 checking account tomorrow but not at the cost of my grandchildren’s future discretionary spending. We should look at historical data on stimulus packages and their adverse economic benefit and we ought to consider the negative impact doubling the federal deficit would cause.

Why not cut capital gains taxes to bring back the trillions of dollars American investors hide in off-shore shell corporations. Why not cut small-business taxes (I believe it’s around 35% now) and help them raise capital and private equity that will eventually create jobs. Mitt Romney put it better than I can by stating; “we know that only the private sector – entrepreneurs and businesses large and small – can create the millions of jobs our country needs. The invisible hand of the market always moves faster and better than the heavy hand of government.” The Keynesian approach to economics is not the wisest choice of macroeconomics. Why not place a tax on our carbon footprint (tax gasoline, etc.). Wouldn’t it make sense that if we raise taxes on gasoline the drivers of Range Rovers (supercharged of course) getting 13 mpg would begin to investigate new fuel resources and eventually, dependency on foreign oil would diminish? I am with T. Boone Pickens, wind power rules…by the way, a Range Rover is still on my Christmas wish list :)

Also, why not cut income taxes; I never understood why a government would castigate a tax payer for working hard…not to say that I work hard ;) Rather than income taxes why not introduce a consumption tax, hopefully raising cigarette, alcohol, and fast food prices to diminish adverse health related consumption. Over 650,000 Americans died last year of heart disease. Hello good health, goodbye atherosclerosis. Government healthcare spending is roughly 15% of GDP, in other words $2.26 trillion in 2007 alone. That’s another story…sorry for being so tangential but I am all for these lateral tax shifts only if we can have greater government spending oversight and regulation. Whatever happened to that $350 billion Paulson spent in TARP funds, and wasn’t he the CEO for Goldman Sachs at one point?

Finally, I do not believe that President Obama’s personality will cure the global recession nor do I believe that scare tactics should be used to motivate tax payers…besides, the current plan will ultimately devalue the dollar by loaning too many U.S. backed securities to China and so far, an expansionary stance of fiscal policy has not been effective in stabilizing the current economic climate. President Obama’s duplicity and rhetorical indifferences will never realize a completely synergistic American society…that was a mouthful :)

I believe this wonderful country was founded upon by noble leaders that were led by eternal principles. I do not see the doom and gloom our current president sees nor think that we should hastily act on pork filled incentive packages and tax increases. I truly envision a tangible change that can take place any day now; all that is left is the work.

Posted by jds319 | Report as abusive

Why do people still believe in the Republicans’ voodoo economics that started with Ronald Reagan? Do you remember how we got into this mess? Reagan sold us down the tubes financially with his massive tax cuts for the super rich based on his trickle-down theory. Clinton finally got us back on the right track and then Bush comes along and comes very close to totally destroying the economy. A massive bail-out was the only thing that saved us from a severe depression. Now the Republicans are going back to Reagan and starting over again.

Posted by sepherim | Report as abusive

Once again, the president engages in class warfare to pit people against their employers. And tries to scare seniors and students into believing that the rich want to do away with them or keep them in servitude. Empty words with tactics to enrage and confuse. All those who are on entitlements become afraid that under anyone fiscally conservative that they will lose their goodies. Well, they will when those who can afford to pay cannot anymore. Is it fair to take more from those who work hard and give it to those who will not? Notice I did not say cannot, there is the rub and the difference. I want to help those who cannot help themselves, not those who will not. I a so sick of hate those who have more, without those who have more, those without would have nothing.

Posted by DLINID | Report as abusive

In a way the plans are not that different, at least in terms of the aggregate level of deficit reduction which is the most relevant thing to the conversation. Obama’s plan gives us $4 trillion in reduction over 12 yrs, Ryan’s $4.8 over 10. Ryan’s therefore is certainly more effective but calls for a greater sacrifice on the part of Americans…excepting of course those at the top.

I would prefer Obama’s plan if I thought it were realistic, but I’m just not sure that it is. I would prefer Ryan’s plan more if he were willing to raise taxes on the top income earners to speed up the deficit reduction process. Many rich people are not job creators, most job creation comes from small businesses and the middle class, only about 3% of which would have been adversely affected by a repeal of the Bush tax cuts for the top income bracket. It seems to me then that, once again, ideology stands in the way of progress. Democrats are too afraid to cut and Republicans are too stubborn to raise revenue.

Posted by adarkrage27 | Report as abusive

For DLINID: did it ever occur to you that the wealthy take more from the economy than the poor? I’m not rich, I am retired, but I assure you I get more than enough from my retirement income. And I certainly wouldn’t mind having my taxes raised even if I don’t make even $50M per year. If I’m willing to give more to take care of those who can’t help themselves, why are the extremely wealthy so hesitant. I believe I owe my country for everything that I have. I would like to think that most Americans do.

Posted by palmer1619 | Report as abusive

Ryan’s plan seems to rely on leaving everyone who retires on their own to find benefits using money they save rather than money they actually have! We cannot privatize Medicare it won’t work! Greed permeates every health care executive in our country! Privatizing doesn’t reduce the cost to the economy… it will only shift where the money comes from.

Posted by abkisa | Report as abusive

Since everyone, especially republicans, love throwing around the term “shared sacrifice” then everyone should clearly support the one of these two plans that actually makes the sacrifices shared, Obama’s. Ryan’s gives more money to the wealthy who wont be effected by the cuts.

Christina Moorshead

Posted by c_moorshead | Report as abusive

[...] Reuters Blogs (blog) [...]

It seems sad that the rich who poured millions into the November congressional elections are so against pouring millions into taxes for our economy. I feel its right to raise taxes on the rich. Even some well know and well off rich men and women say the same. The Gates are some of these.
Its time to consider a broad flat tax on all consumables and eliminate the IRS.

Posted by EAMII | Report as abusive

It is nonsensical to compare these two plans: Ryan uses a set of numbers from the Heritage Foundation that even *they* say makes no sense.

Ryan’s’ plan actually increases the deficit, apart from being Randian claptrap, morally.

Posted by tophersteele | Report as abusive

I notice that neither plan deals with one of the real sources of our financial woes, the trade imbalance. Until we start making things in this country for our own consumption and for export instead of importing such great qualities of all that we consume (or else drastically curtail our consumption), we will be in debt, and no amount of government budget cutting will resolve that problem. The U.S. issues bonds to cover our trade debt in vast amounts. Sooner or later those buying the bonds will worry and begin to sell. The problem is not that our government spends more than the taxes it collects, the problem is that as a nation we buy more than we produce. Why does no major political figure discuss this publicly?

Posted by mabellillian | Report as abusive

The prayer of the Republican: God heal the sick, feed the hungry, give strength to the weak, take care of the elderly, watch over the child who suffers…oh, and God? Please do so in a way that will not require any help from me.

Posted by alan71201 | Report as abusive

Could someone please tell me how Ryan’s Plan giving trillions of dollars to insurance companies (who’s sole purpose is to spend as little of it as possible actually paying it out in benefits) to cover the elderly whom it is guaranteed by the very nature of being elderly to cost more than it will be possible to profit from.

Conservative or liberal, right wing or progressive how can you see this as anything but insane.

If this was done 10 years ago where would your parents or grandparents be? Would you be helping them out or letting them fend for themselves?

If this becomes law, which of your children or grand children will be responsible for you after the stroke? or do you plan on having 10,000 -20,000 a month hanging around to get you through. If they approve this plan they better attach one of those riders they are so fond of… legalizing assisted suicide.

Posted by waywrdchld | Report as abusive

For Rakooi – (“It takes 10% more to get comparable service from the private sector than Medicare or Medicaid. It is called the profit”).

There is no profit in insuring the elderly or chronically ill children and adults. None, zero. Back when healthcare was comparatively cheap it couldn’t be done it is why we have Medicare and Medicaid today. Mr Ryan’s plan is a fraud to steal trillions of $ from working people and give it to Insurance Companies. I wonder what the rate will be for a retired woman of 67 with a history of breast cancer and her 70 year old husband that survived 2 heart attacks and has a pacemaker that’s due for replacement in a couple years? Has anyone that even remotely thinks this could be a good idea ever looked at their parents or grand parents medical bills? the cost of a nursing home? The only way this works for insurance companies is to take the money and not cover you. Its a fraud.

Posted by waywrdchld | Report as abusive

Those of you who buy into this Republican shenanigans, all I have for you is:
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
This party and Ayn Rand fanatics made word and concept of “welfare” a dirty word. General welfare was one of our nation’s founding principles. These guys act like only the rich deserves those welfare privileges.

Posted by azt | Report as abusive

Incredible.We are in a crisis and Ryan wants to lower taxes for the top earners to 25%!!!!! The top earners are not struggling. They are making record profits.

And he wants to turn medicare into block grants to be handled at the state level?! ! ! ! Isn’t that like passing the buck on responsibility of care for our seniors?

Meanwhile both Obama and Ryan want to keep the department of defense expenses high.

Neither plan is good for the people of this country. Both men would run the country into the ground, but Obama’s plan is slightly less offensive.

Posted by melmelmel | Report as abusive

I’m sick of these lying Democrats and the liberals out there who are stupidly being duped to vote for these people.

To the people who say “Republicans just cut taxes on the rich” or “Republicans cheat middle class and poor people”: guess what? the rich are the ones who pay taxes (by the way they pay way more than their fair share, the top 1% pay more than 33% of the federal income tax despite having less than 20% of the wealth)

You can’t cut taxes on the poor, because they don’t pay taxes!

I don’t know about you, but I personally like to have the freedom to do what I want with my money. I think I can spend my money better than the government can.

Posted by TehInternetz | Report as abusive

@ReganLogan Not true Ryan’s plan will actually increase the debt to 70% of the GDP over time. You’re comment is false and without evidence, logic, brain, or sense.

Posted by Joshlamb17 | Report as abusive

0bama had a plan?

Last year, the Democratic majority in Congress failed to send to the President even one of the 12 annual appropriations bills that fund the federal government.

This was the first time this has happened since 1974, and another indication of the dysfunctional nature of our budget process.”

Only real plan Obama can come up with is his next vacation or golf game.

Posted by salty | Report as abusive

I am amazed that someone could actually claim that Ryan has a “better” plan.

Ryan’s plan is so unrealistic, that the CBO said that it will actually increase the deficit. Republicans may not like it, but taxes are eventually going up. Just like they did when Reagan was president.

You can not grow the economy by tax cuts, and you can’t pay for the wars with tax cuts.

Oh, and the idea that you could privatize Medicare is absolutely absurd. What insurance company wants the people that blow up their profit margin?

Posted by Aunty_B | Report as abusive


Paul Ryan’s plan is not better then Obama’s plan. Obama’s plan is better and actually reduces more of the deficit because Paul Ryan’s plan adds nearly 5 trillion in tax cuts so the tax cuts that are extended in Paul Ryan’s plan offsets the deficit reductions in Paul Ryan’s plan. Paul Ryan’s plan also increases the public national debt in the trillions over the next 10 years and increases the debt to be 70% of GDP.

Obama’s plan technically reduces more in the deficit because his plan is not offset by tax cuts and he is brave enough and knowledgeable enough to make cuts on all sides as well as face tax increases

Posted by filmmaker1989 | Report as abusive

[...] Reuters Blogs (blog) [...]

I do believe people in Washington are living in fantasy land. How in the world do they think seniors would be able to afford health insurance with a voucher? My husband and I are 63. He was laid off after 25 years because of lack of work. Our cobra payments are $1107. per month plus a $50 co-pay to see the doctor. This past month it was $200 due to test that had to be done. And that does not include medication. We are not overweight, we eat healthy, exercise and after calling insurance companies in Florida were told to basically take the Cobra because that’s probably the best rate we were going to get. I would like those in Washington to go on the health plans that “We” the people are on and at the same time give up their pensions and go on social security and they can see how the real American people live.

Posted by carsok | Report as abusive

Lets give seniors a voucher, because we all know that a 70 year old person with chronic problems will get such a sweet deal on their insurance premiums.

The republican plan is nothing but failure, and it is up for progressives to drowned out the noise being made by the regressive GOP tea party.

This is our country and we won’t let them destroy it.

Posted by ddaryl | Report as abusive

It’s amazing how completely blind republicans are to the fact that tax cuts reduce revenue that can be used to pay down debt and curb deficits…

but lets keep reducing taxes because that has done so well for the average American, and has done a terrific job of helping republicans obtain their goal of… what is their goal again…. it sure as hell…it is not to reduce the debt or deficits… it’s to put more money into the hands of a few who use lawyers and high priced accountants to expose complex loopholes in our tax system and put more money into their pockets instead of doing the patriotic thing of continuing to keep this countries infrastructure in top shape

Posted by ddaryl | Report as abusive

[...] “Obama vs Ryan: how the deficit plans compare” Reuters [...]

We cripple our economy spending more than half a trillion dollars a year on the military (nearly a third of our nation’s tax resource). Nearly half of what the global cost of military expense is paid for by Americans. Yet neither Republicans nor Democrats are will to address one of the largest cost areas of the budget.

Why does military spending enjoy certain immunity from scrutiny that all other areas of the budget face?

Posted by Conan69 | Report as abusive

[...] WTHR - WTMA - NewsTa bulous all 685 news articles » Paul Ryan » Reuters Blo… [...]

Hannah Econ2301

I agree with Ryan’s take on handling the deficit problem that the US faces. Cut government spending which would offset the tax cuts that would be taking place for businesses and individuals. I think it’d be more effective to go with his plan (as well as some sacrifice) than to go with Obama’s. The tax money that would be saved by throwing out Obama’s Health Plan would allow for Ryan’s plan to decrease the corporate/personal tax rate from 35% to 25%. There needs to be less government spending to get the US out of this deficit, plain and simple. If there isn’t money to spend, DON’T spend it. Personally, I’ve got this concept down to an art.

Posted by hhamilton86 | Report as abusive

[...] a bold decision that turns the race from a referendum on the unemployment rate to a choice between two very different fiscal paths for America. After months of empty rhetoric and dancing around issues, Romney has pivoted the [...]